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Recent EU mining developments

Just Two Weeks Left for Stakeholders to Participate in the European Commission’s Consultation on Conflict Minerals

The European Commission launched a consultation on 27 March 2013 on a “potential EU initiative for responsible sourcing of minerals coming from conflict-affected and high-risk areas” (see McGuireWoods Legal Alert “Recent EU Mining Developments,” dated 18 April 2013). The consultation is open until 26 June 2013 and will be managed by the European Commission's Directorate-General for Trade.

Senior commission officials, speaking at the European Parliament last week, indicated that this was more than just a potential initiative and that the European Commission would in all likelihood adopt a legislative proposal and a communication on conflict minerals by the end of 2013. These will be based on the information collected from stakeholders during the consultation, amongst other sources. The legislative proposal is expected to be turned into a final EU regulatory framework by the EU’s co-legislators, the European Parliament and the European Council (composed of the EU’s member states) in the next two years or so (i.e., under the new commission). As is often the case, a large proportion of the European Commission’s legislative proposal is likely to end up in the final text.

Rather than undermining the efforts of international organizations such as the Organisation for Economic Co-operation and Development’s (OECD) due diligence guidance, or overlapping with existing legislation such as Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act in the United States and the U.S. Securities and Exchange Commission’s Conflict Minerals Rule (see McGuireWoods Legal Alert “SEC Issues (Limited) Conflict Minerals Guidance,” dated 4 June 2013) which is now in the early phases of implementation, the European Commission explained that it means to adopt a system built upon the experience gathered by operators implementing existing schemes, improve on them, and design a regulatory framework that stands a chance, ultimately, to be mutually recognized by the United States and other countries.

With this in mind, the European Commission is urging stakeholders and, in particular, corporations and organizations that have actual experience in the management of supply chains, either in order to comply with the Dodd-Frank Act or as part of voluntary schemes, to share such experience in the ongoing consultation. The message is clear: lofty and high-level submissions would be of little added value at this stage. However, very practical examples of what has and has not been successful in existing frameworks and legislations (including how the EU could help improve them) will be considered, and may find their way into the European Commission’s proposal.

If you have concrete ideas about how to improve existing frameworks and schemes, such as the Dodd-Frank Act, now is the time to make your views known. A detailed description of this initiative and a link to the questionnaire can be found on the European Commission’s website.